Higher cotton prices dent H&M profits

Fashion retailer H&M today said profits had dived 10% in its fourth quarter as the Swedish chain grappled with soaring cotton prices.

The company, which has more than 180 stores in Ireland an the UK and some 2,200 stores worldwide, said margins were under pressure from higher raw material prices, with cotton costs doubling in 2010, as well as rising transport costs.

The Stockholm-based retailer, which operates in 38 countries, reported profits of 7.2 billion Swedish kronor (€814m) in the three months to November 30, compared to 7.99 billion Swedish kronor (€903m) a year earlier.

Shares in Next, Primark owner Associated British Foods and Marks & Spencer all slipped on the London stock market today.